FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Plan period ended December 31, 1996 Commission File Number 1-812 CARRIER CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN (Full title of the plan) UNITED TECHNOLOGIES CORPORATION One Financial Plaza Hartford, Connecticut 06101 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) FINANCIAL STATEMENTS OF THE CARRIER CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the Carrier Corporation Represented Employee Savings Plan In our opinion, the accompanying statements of net assets available for benefits with fund information and the related statement of changes in net assets available for benefits with fund information present fairly, in all material respects, the net assets available for benefits of the Carrier Corporation Represented Employee Savings Plan at December 31, 1996 and 1995, and the changes in net assets available for benefits for the period ended December 31, 1996, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP Hartford, Connecticut June 26, 1997 CARRIER CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Net Assets Available for Benefits With Fund Information December 31, 1996 (Thousands of Dollars, except unit value) The accompanying notes are an integral part of these financial statements.
UTC Funds Income Equity Stock Global Loan Combined Fund Fund Fund Fund Fund Assets: Investments: Beneficial interests in contracts issued by insurance companies, at cost plus accrued $ 35,546 $ - $ - $ - $ - $ 35,546 interest Beneficial interests in Bankers Trust Company Pyramid Fixed Income Index Fund, at market - - - 124 - 124 Beneficial interests in Bankers Trust Company Pyramid Equity Index Fund, at market - 12,917 - 145 - 13,062 Beneficial interests in Bankers Trust Company Pyramid International Securities Index Fund, at market - - - 165 - 165 United Technologies Corporation Common Stock, at market - - 4,443 - - 4,443 Participant loans, at cost - - - - 486 486 Temporary investments, at cost plus accrued interest 1 - 1 - - 2 Total Investments 35,547 12,917 4,444 434 486 53,828 Contributions and fund transfers receivable 11 4 8 2 3 28 Total Assets 35,558 12,921 4,452 436 489 53,856 Liabilities: Contributions and fund transfers payable 117 1 7 - - 125 Loans payable, net 43 23 24 1 (16) 75 Total Liabilities 160 24 31 1 (16) 200 Net Assets Available for Benefits $35,398 $12,897 $ 4,421 $ 435 $ 505 $ 53,656 Units of participation 6,198,956 818,623 408,087 210,593 505,000 Unit value $ 5.71 $ 15.75 $ 10.83 $ 2.07 $ 1.00 CARRIER CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Net Assets Available for Benefits With Fund Information December 31, 1995 (Thousands of Dollars, except unit value)
The accompanying notes are an integral part of these financial statements.UTC Funds Income Equity Stock Global Loan Combined Fund Fund Fund Fund Fund Assets: Investments: Beneficial interests in contracts issued by insurance companies, at cost plus accrued interest $ 31,777 $ - $ - $ - $ - $ 31,777 Beneficial interests in Bankers Trust Company Pyramid Fixed Income Index Fund, at market - - - 44 - 44 Beneficial interests in Bankers Trust Company Pyramid Equity Index Fund, at market - 8,454 - 56 - 8,510 Beneficial interests in Bankers Trust Company Pyramid International Securities Index Fund, at market - - - 52 - 52 United Technologies Corporation Common Stock, at market - - 1,929 - - 1,929 Participant loans, at cost - - - - 267 267 Temporary investments, at cost plus accrued interest 1 - 47 - - 48 Total Investments 31,778 8,454 1,976 152 267 42,627 Contributions and fund transfers receivable - 74 36 19 3 132 Total Assets 31,778 8,528 2,012 171 270 42,759 Liabilities: Contributions and fund transfers payable 321 14 - - - 335 Loans payable, net 7 - (1) - (8) (2) Accrued investment purchases - - - 2 - 2 Total Liabilities 328 14 (1) 2 (8) 335 Net Assets Available for Benefits $ 31,450 $ 8,514 $ 2,013 $ 169 $ 278 $ 42,424 Units of participation 5,924,141 665,730 264,094 90,592 278,000 Unit value $ 5.31 $ 12.79 $ 7.62 $ 1.86 $ 1.00 CARRIER CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits With Fund Information Period Ended December 31, 1996 (Thousands of Dollars)
The accompanying notes are an integral part of these financial statements. CARRIER CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Notes to Financial Statements NOTE 1 - DESCRIPTION OF THE PLAN General. The Carrier Corporation Represented Employee Savings Plan (the Plan) is a defined contribution savings plan administered by United Technologies Corporation (UTC). It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Union represented employees of Carrier, covered by a collective bargaining agreement that provides for Plan participation, are eligible to participate in the Plan after completing at least one year of service. The following is a brief description of the Plan. For more complete information, participants should refer to the plan document which is available from UTC. Contributions and Vesting. All participants may elect, through payroll deductions, to make after-tax contributions of between $2 per week and a maximum amount as permitted by the relevant collective bargaining agreement. Certain participants, depending on their collective bargaining agreement, may also make tax-deferred contributions. Participant contributions, plus actual earnings thereon, are fully vested at all times under the Plan. The employer will generally match 50 percent of the participant's contributions, up to specified limits. Generally, employer contributions, plus actual earnings thereon, become fully vested after two years of Plan participation. Participant Accounts. Each participant's account is credited with the participant's contributions and allocations of (a) UTC's contributions and (b) Plan earnings. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. Forfeited balances of terminated participants' nonvested amounts are used to reduce future employer contributions. For the period ended December 31, 1996, approximately $ 8,300 of forfeitures were used to fund employer contributions. Investment Options. Participants may elect to allocate the contributions in any whole percentage among the following funds. Participants are permitted to transfer their accounts between investment funds once per quarter in any whole percentage. . The Income Fund is invested in contracts issued by five insurance companies. . The Equity Fund is principally invested in the BT Pyramid Equity Index Fund, which is a commingled trust fund managed by Bankers Trust Company (BT), the Trustee, and includes a portfolio of common stocks replicating the Standard & Poor's Composite Index of 500 stocks. . The UTC Stock Fund consists principally of 67,069 and 40,670 shares of UTC Common Stock at December 31, 1996 and 1995, respectively. Share amounts reflect the 2 for 1 stock split effective December 10, 1996. . The Global Fund is invested in almost equal proportions in three different funds managed by the Trustee: the BT Pyramid International Securities Index Fund, the BT Pyramid Fixed Income Index Fund and the BT Pyramid Equity Index Fund (as described above). The BT Pyramid International Securities Index Fund invests in four other international index funds managed by the Trustee. The BT Pyramid Fixed Income Index Fund invests primarily in obligations of the U.S. Government and its agencies and other publicly traded, high-grade domestic debt instruments. Participant Loans Receivable. Certain participants with at least two years of plan participation are allowed to borrow up to 50 percent of their vestedUTC Funds Income Equity Stock Global Loan Combined Fund Fund Fund Fund Fund Additions to net assets attributed to: Investment Income: Net appreciation in fair value of investments $ - $ 2,195 $ 973 $ 36 $ - $ 3,204 Interest 2,421 - 3 - 28 2,452 Dividends - - 58 - - 58 Total Investment Income 2,421 2,195 1,034 36 28 5,714 Contributions: Participants' 4,502 1,580 551 97 - 6,730 Employer's 1,587 514 179 33 - 2,313 Total Contributions 6,089 2,094 730 130 - 9,043 Repayments on loans 87 36 17 1 (141) - Deductions from net assets attributed to: Cash distributions to participants 2,679 632 200 7 36 3,554 Loans to participants 225 90 53 8 (376) - Total Deductions 2,904 722 253 15 (340) 3,554 Inter-fund and inter-plan transfers (1,745) 780 880 114 - 29 Net Increase 3,948 4,383 2,408 266 227 11,232 Net Assets Available for Benefits December 31, 1995 31,450 8,514 2,013 169 278 42,424 Net Assets Available for Benefits December 31, 1996 $ 35,398 $12,897 $ 4,421 $ 435 $ 505 $ 53,656 account balances. Loan amounts can range from $1,000 to $50,000 and must be repaid within 5 years. The loans are secured by the balance in the participant's account and bear interest at Bankers Trust's prime rate plus one percent. Principal and interest are paid ratably through payroll deductions. Payment of Benefits. Generally, benefits are paid in a lump sum to a terminating participant. A participant terminating due to retirement may elect to receive benefits in installments over two to fifteen years. At the participant's election, the portion of a lump sum distribution attributable to the UTC Stock Fund may be paid in shares of UTC Common Stock instead of cash. There were no distributions in common stock for the period ended December 31, 1996. Other. Participants who transfer to a new UTC location with a different savings plan have the option of transferring their account balances in accordance with the provisions of the new savings plan. NOTE 2 - SUMMARY OF ACCOUNTING PRINCIPLES Basis of Accounting. The financial statements of the Plan are prepared under the accrual method of accounting. Benefits are recorded when paid. Master Trust. The Plan's assets are kept in a Master Trust maintained by the Trustee. Under the Master Trust agreement, the assets of certain employee savings plans of UTC and its subsidiaries are combined. Participating plans purchase units of participation in the investment funds based on their monthly contribution to such funds and the unit value of the applicable investment fund at the end of the month. The unit value of each fund is determined at each month end by dividing the sum of uninvested cash, accrued income and the current value of investments by the total number of outstanding units in such funds. Income from the funds' investments increases the plans' unit values. Distributions to participants reduce the number of participation units held by the plans. Investment Valuation. Except for the Income Fund, the Plan's investments are stated at fair value. The fair value of the Equity Fund, the UTC Stock Fund, and the Global Fund is determined by the Trustee by reference to published market data. The Income Fund's investment contracts are stated at contract value which represents contributions plus earnings, less Plan withdrawals. Plan Expenses. Plan expenses are payable out of Plan assets, unless paid by the employer. The expenses for the 1996 plan year were paid by the employer. Use of Estimates. The preparation of financial statements requires UTC to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates. NOTE 3 - INVESTMENT CONTRACTS Under these contracts, each insurance company guarantees repayment in full of the principal amount invested plus interest credited at a fixed rate for a specified period. Interest is credited to each contract based on an annual interest rate set each year by the individual insurance companies. This rate, which differs among contracts, takes into account any difference between prior year credited interest and the actual amount of investment earnings allocable to the contract in accordance with the established allocation procedures of the insurance company. The weighted average rates for 1996 were 7.5% and 7.25%, respectively. The following is a summary of the investment contracts held in the Income Fund and the portion allocable to the Plan: NOTE 4 - PLAN TERMINATION Although it has not expressed any intent to do so, UTC has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts. NOTE 5 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following are reconciliations of net assets available for benefits and benefits paid from the financial statements to Form 5500:
(Thousands of Dollars) December 31, December 31, 1996 1995 CIGNA $ 1,512,307 $ 1,566,944 Aetna 457,815 494,944 Travelers 388,845 432,342 Prudential 236,966 219,677 Metropolitan Life 782,764 587,847 $ 3,378,697 $ 3,301,754 Amount of the contracts allocable $ 35,546 $ 31,777 to the Plan Year Ended December 31, 1996 Benefits paid to participants per the financial statements $ 3,554 Add: Amounts allocated to participant withdrawals at December 31, 1996 836 Less: Amounts allocated to participant withdrawals at December 31, 1995 (411) Benefits paid to participants per Form 5500 $ 3,979 Amounts allocated to participant withdrawals are recorded on Form 5500 for benefit claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date.
December 31, (Thousands of Dollars) 1996 1995 Net assets available for benefits per the financial statements $ 53,656 $ 42,424 Amounts allocated to participant withdrawals (836) (411) Net assets available for benefits per Form 5500 52,820 42,013 NOTE 6 - TAX STATUS The Internal Revenue Service has determined and informed UTC by letter dated September 23, 1996 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letters. However, the Plan administrator and tax counsel believe that the Plan is designed and currently being operated in compliance with the applicable requirements of the IRC. NOTE 7 - SUBSEQUENT EVENT Effective January 1, 1997, Fidelity Institutional Retirement Services Company assumed the participant account recordkeeping responsibilities from Bankers Trust. SIGNATURES The Plan (or other persons who administer the employee benefit plan), pursuant to the requirements of the Securities Exchange Act of 1934, has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. CARRIER CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Dated: June 26, 1997 By: /s/ Daniel P. O'Connell Daniel P. O'Connell Corporate Director, Employee Benefits and Human Resources Systems United Technologies Corporation Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-11255) of United Technologies Corporation of our report dated June 26, 1997 appearing in the Carrier Corporation Represented Employee Savings Plan's Annual Report on Form 11-K for the period ended December 31, 1996. PRICE WATERHOUSE LLP Hartford, Connecticut June 26, 1997